The Cliff Note Version:
- Choose the Correct Business Type
- Have a Business Lawyer Register Your Business with the Secretary of State
- Have a Business Lawyer Draft Your Operating Agreement or Bylaw
- Apply for an EIN from the IRS
- Apply for Business Licenses & Permits
Sabarwal Law can help you decide whether a Sole Proprietorship, Partnership. LLC, a C Corp or S Corp is best for your needs. Generally. our firm recommends a LLC or a S Corp due to the protections one receives from personal liability as well as for taxation purposes.
Register Your Business with the Secretary of State
Once you decide which business type is right for you, you must register your LLC or S-Corporation with the Secretary of State.
After you have decided which state you will be forming your LLC or S-Corporation, you will need a Registered Agent in that state.
Registered Agent is an individual or organization who resides in your state of formation who accepts important legal documents on behalf of your company.
Registered Agent must have a physical address (P.O. box is not accepted), and must be available at that address during normal business hours.
Have a Business Lawyer Draft Your Operating Agreement or Bylaws
Operating Agreement is necessary for LLCs which is an agreement between the members that establishes the management and operations of the LLC. This is a necessary legal document for your LLC to get personal liability protection.
Bylaws is necessary for Corporations which is a corporate document that set out the basic rules for operating your corporation.
Bylaws is not filed with the state and your corporation is not legally required to have corporate Bylaws, but you should have Bylaws because it establish your corporation’s operating rules, and help show banks, creditors, IRS, and others that your corporation is legitimate.
LLCs are very flexible in nature and the Operating Agreement defines each member’s rights, powers, and entitlements. Operating Agreement includes capital accounts, membership interest, distributions of profit and allocated tax responsibility, etc.